Pizza Hut 2012 Annual Report Download - page 86

YUM! BRANDS, INC.-2013Proxy StatementA-4
Proxy Statement
APPENDIX
(ii) the number and type of Shares (or other property) subject
to outstanding Awards;
(iii) the grant or Exercise Price with respect to outstanding
Awards; and
(iv) the terms, conditions or restrictions of outstanding
Awards and/or Award agreements;
provided, however, that all such adjustments made in respect
of each ISO shall be accomplished so that such Option shall
continue to be an incentive stock option within the meaning
of Section 422 of the Code. However, in no event shall this
paragraph (f) be construed to permit a modifi cation (including
a replacement) of an Option or SAR if such modifi cation
either: (i) would result in accelerated recognition of income or
imposition of additional tax under Code section 409A; or (ii)
would cause the Option or SAR subject to the modifi cation
(or cause a replacement Option or SAR) to be subject to
Code section 409A, provided that the restriction of this clause
(ii) shall not apply to any Option or SAR that, at the time it
is granted or otherwise, is designated as being deferred
compensation subject to Code section 409A.
4.3 General Restrictions. Delivery of shares of Stock or other
amounts under the Plan shall be subject to the following:
(a) Notwithstanding any other provision of the Plan, the Company
shall have no liability to deliver any shares of Stock under
the Plan or make any other distribution of benefi ts under the
Plan unless such delivery or distribution would comply with all
applicable laws (including, without limitation, the requirements
of the Securities Act of 1933), and the applicable requirements
of any securities exchange or similar entity.
(b) To the extent that the Plan provides for issuance of stock
certifi cates to refl ect the issuance of shares of Stock, the
issuance may be effected on a non-certifi cated basis, to
the extent not prohibited by applicable law or the applicable
rules of any stock exchange.
4.4 Tax Restrictions.
(a) All distributions under the Plan are subject to withholding of
all applicable taxes, and the Committee may condition the
delivery of any shares or other benefi ts under the Plan on
satisfaction of the applicable withholding obligations. The
Committee, in its discretion, and subject to such requirements
as the Committee may impose prior to the occurrence of such
withholding, may permit such withholding obligations to be
satisfi ed through cash payment by the Participant, through
the surrender of shares of Stock which the Participant already
owns, or through the surrender of shares of Stock to which
the Participant is otherwise entitled under the Plan.
(b) Subsections 4.5, 4.6 and 4.7 shall be subject to the following:
(i) Subsection 4.5 shall not be construed to permit the grant
of a replacement Option or SAR if such action would
cause the Option or SAR being granted or the option
or stock appreciation right being replaced to be subject
to Code section 409A, provided that this paragraph (i)
shall not apply to any Option or SAR (or option or stock
appreciation right granted under another plan) being
replaced that, at the time it is granted, is clearly and
expressly designated as being deferred compensation
subject to Code section 409A.
(ii) Except with respect to an Option or SAR that, at the
time it is granted, is clearly and expressly designated as
being deferred compensation subject to Code section
409A, no Option or SAR shall condition the receipt of
dividends (including dividend equivalents) with respect
to an Option or SAR on the exercise of such Award, or
otherwise provide for payment of such dividends in a
manner that would cause the payment to be treated
as an offset to or reduction of the exercise price of the
Option or SAR (or an increase to the compensation
payable under the Option or SAR) pursuant Treas. Reg.
§1.409A-1(b)(5)(i)(E).
(iii) Neither subsection 4.5, 4.6 nor 4.7 shall be construed
to permit a modifi cation of an Award, or to permit the
payment of a dividend or dividend equivalent, if such
actions would result in accelerated recognition of taxable
income or imposition of additional tax under Code section
409A.
(iv) Except for Options and SARs clearly and expressly
designated at the time of grant as intended to be subject
to Code section 409A, subsections 4.5, 4.6, and 4.7
shall not be construed to permit the deferred settlement
of Options or SARs, if such settlement would result in
deferral of compensation under Treas. Reg. §1.409A-1(b)
(5)(i)(A)(3).
(c) At all times, this Plan shall be interpreted and operated (i)
with respect to 409A Awards (as defi ned in Section 8 below),
in accordance with the requirements of Code section 409A,
unless an exemption from Code section 409A is available
and applicable, (ii) to maintain the exemptions from Code
section 409A of Options, SARs and Restricted Stock, unless
any such Award is expressly and clearly designated as
deferred compensation at the time of its grant, and any
Awards designed to meet the short-term deferral exception
under Code section 409A, and (iii) to preserve the status of
deferrals of compensation that were earned and vested prior
to January 1, 2005 as exempt from Code section 409A, i.e.,
to preserve the grandfathered status of such deferrals. To
the extent there is a confl ict between the provisions of the
Plan relating to compliance with Code section 409A and the
provisions of any Award agreement issued under the Plan,
the provisions of the Plan control. Moreover, any discretionary
authority that the Committee may have pursuant to the Plan
shall not be applicable to an Award that is subject to Code
section 409A to the extent such discretionary authority would
confl ict with Code section 409A. In addition, to the extent
required to avoid a violation of the applicable rules under
Code section 409A by reason of Code section 409A(a)(2)
(B)(i), any payment under an Award shall be delayed until the
earliest date of payment that will result in compliance with the
rules of Code section 409A(a)(2)(B)(i) (regarding the required
six-month delay for distributions to specifi ed employees that
are related to a separation from service). In the event that
any Award shall be deemed not to comply with Code section
409A, then neither the Company, the Board of Directors,
the Committee nor its or their designees or agents, nor any
of their affi liates, assigns or successors (each a “protected
party”) shall be liable to any Award recipient or other person